Per AIP-15.3 and AIP-15.4, the community has decided to allocate a total of 1,750,000 ALPACA as incentives for the Perp and AF2.0 product launch. ALPACA were to come from various sources
February Emission:
Per AIP-15.5, the community has also voted to use February emission as part of the incentives rewards. In total, 350,381.7 ALPACA was collected. (TX Proof)
Unclaimed ITAM rewards:
Per AIP-1, the last day to claim ITAM rewards was 15 March 2023. In total, there was 1,542,758 unclaimed ALPACA (TX Proof)
Currently, we have 305k ALPACA + $2.7k USD in other assets in the liquidation treasury. ( Address)
Early Withdrawal Fee:
Currently, we have 271k ALPACA in the early withdrawal fee wallet. (Address)
Based on the info above, we have more than required ALPACA for AIP-15 from the liquidation treasury, early withdrawal fee, and Unclaimed ITAM rewards. Extra ALPACA (~370k ALPACA) from these three sources will go towards weekly burns over time.
This means the entire amount (350k ALPACA) from February will not be needed for Perp and AF2.0 incentives. And as stated in AIP15.5, the community will get to decide what to do with this portion of ALPACA.
Discussion:
This forum topic invites our community to discuss how to handle the February emission portion of ALPACA.
Some high-level direction we can take:
Burn
Reserve for future initiatives / product launches
We also welcome other suggestions from the community.
I prefer option 2, and I believe that we should create a treasury.
The treasury can be used to incentivize AF2.0 (for cross-chain) or other future initiatives / product launches and avoid all the income being used to buy ALPACA at high price.
For example, we can set the minimum and maximum of the treasury as $250K / $500K (similar incentives for AF2.0 and perps)
We can put half of the weekly revenue (not include governance part) into the treasury when the price is above 200MA until the treasury reaches its maximum value. Conversely, when the price falls below 200MA, we can take out a portion of the treasury to increase the weekly burn by 150% and keep the treasury above minimum value.
I actually agree with the idea of having a treasury, the problem is that is difficult to predict the market and burns are a fundamental part of Alpaca as a platform, I would propose a different solution more fundamental instead of technical like the 200SMA.
I was going to propose this in the forum when the ALPACA price would be higher but here it goes.
When the “Yearly estimated burn rate as a part of revenue” is more than a percent of the market cap, say 5%, we burn the earnings, instead when burns are less than 5% market cap because price has increased we save the burns in a treasury.
Of course this means saving ALPACA is the wrong answer here as it could devalue and as our objective is to increase the burns I believe is a better option to sell the ALPACA and convert it to a stable like USDT, then when price is down and the revenue is again more than 5% of the market cap then we can starts the burns again like a company would do.
To answer the discussion, if we save the ALPACA we could use them in the future and the price seems to be increasing as we are entering in a bull market, or it seems so, then if we are going to hold ALPACAS and not sold them for a stable the only negative scenario would be if ALPACA price goes down again and we have depreciated the treasury.
In conclusion I think we should save the ALPACA for future proyects as the only negative scenario is a BEAR market and it seams we are entering a BULL one
I agree with the need to create a treasury (and saving these tokens). If we want to launch new products/features in the future, we will need incentives. We can’t just hope for a new ITAM situation to fund this.
However, instead of using some TA or a solution based on estimated burn rates, we could simply redirect a fixed portion of the revenue used for burning to this treasury. If possible, deposit it into a lending pool (USDT?) or ALP
Thank you for all the comments. It seems like there is no additional options suggested on what to be done with the February emissions.
I will give it until Wednesday March 29th and then move it to AIP with two voting options.
Save for future initiatives
Burn
As for an idea to re-direct a portion of ALPACA from protocol revenue to create additional reserves over time, that should be discussed in a separate thread.
I like the idea of creating an incentives reserve since it will also make them not as hard of a hit on Governance stakers revenue and also reduce voting needs for such distributions.
While creating a reserve for future product incentives could make sense, there are several considerations I think we should keep in mind if we decide to redirect a portion of our weekly protocol revenue to such a reserve.
1.) We are already diverting 50% of Gov. vault rewards to payback bad debt per AIP, so depending on where the $ALPACA would come from, diverting more could lead to a lower APR% for the Governance Vault which will likely lead to fewer users wanting to lock ALPACA in it.
2.) We have already allocated $ALPACA for an upcoming product launch with a clear plan and timeline. Perhaps we can consider redirecting funds towards a future product when we have a definite plan in place.
So, imo, maybe it makes more sense to consider doing this when we have a clear need for it or after the bad debt repayment is completed.
Regarding the idea of establishing a general-purpose treasury, I think it’s important to recognize that managing a treasury in a decentralized manner will be challenging. It requires careful consideration of how funds will be allocated, how proposals will be evaluated and approved, and how the overall treasury will be managed over time. All of these factors require significant effort and resources to establish and maintain, which, in my opinion, might not be the right time.
